Every summer, I pause, grab my surfboard, and allow the market to trend without my involvement for a bit. However, before I head to the beach, I assess the progress made throughout the year.
2025 serves as a classic illustration of the contradictions inherent in investing: everything and nothing is occurring at the same time.
News is inundated with headlines about tariffs, global disputes, and faltering economies. You might find your neighbor forecasting a crash every couple of weeks. Nevertheless, the S&P 500 has risen approximately 6% (including dividends) while the TSX 60 has shown over 9% returns as of July 1st. That’s resilience.
Nothing is What It Appears
In spite of all the noise, markets are holding steady—and even flourishing in certain sectors. In the U.S., the Industrials sector is performing well, likely supported by shifts related to tariffs. Communications have bounced back, driven by Meta’s recovery and AT&T’s resurgence. Utilities, once disregarded, are again becoming favorable. Financials—banks, insurers, and investment firms—are also faring well.
On the flip side, certain problematic sectors continue to present challenges. Consumer Discretionary is facing difficulties, Health Care is a mixed bag with both successes and failures (UnitedHealth, anyone?), and Energy is once more among the poorest performers.
The economic environment mirrors this mix. In the U.S., GDP growth remains stable, unemployment is low, yet housing starts have decreased. It hardly indicates an impending recession.
Canada offers a contrasting narrative. GDP growth is slowing, unemployment is rising, and businesses are bracing for uncertainties related to tariffs. Ironically, even with weaker economic indicators, the TSX is outpacing the S&P 500 this year.
This is the paradox of 2025: weak data, strong markets.
What We Can Learn
The past six months emphasize that headlines shouldn’t dictate your investment strategies. We’ve endured countless “reasons to sell” over the last twenty years—2008’s banking collapse, 2020’s pandemic panic, and the rate hikes of 2022. Each time, the market has prevailed.
This year is no exception. The market continues to progress, benefiting dividend investors who remain resolute.
Highlights from My Stock Selections
While I prioritize long-term investments, I take pleasure in reviewing the mid-year performance of selected stocks. Here’s a brief overview of six of them—three from the U.S. and three from Canada.
U.S. Selections
Earlier this year, I highlighted three undervalued U.S. stocks on my YouTube channel. More information on my selections can be found in the video below (6-month review below).
PepsiCo (PEP)
Pepsi faces challenges from a strong dollar, increased tariffs on concentrate and aluminum, and rising operational costs. Management has revised expectations, predicting flat EPS this year rather than mid-single-digit growth. Nevertheless, with brands like Doritos and Gatorade, Pepsi remains a key player in dividend growth, even during a lackluster year.
Mastercard (MA)
Mastercard continues to achieve double-digit growth, expanding partnerships with Microsoft and OpenAI while introducing innovative payment solutions. Concerns regarding stablecoins haven’t changed the fact that Mastercard and Visa serve as the tollbooths of global commerce. For dividend investors, this embodies the essence of a low-yield, high-growth compounder.
Automatic Data Processing (ADP)
Payroll may seem mundane—but therein lies the charm of reliability. ADP has reported high single-digit growth in both revenue and earnings this year and is on course for another dividend increase. Its dependable business model, with customers remaining loyal for over a decade, positions ADP as one of the most trustworthy dividend growers.
Canadian Selections
I performed a similar analysis in the Canadian market. Find the mid-year review following the video.
Stantec (STN.TO)
Stantec is finally gaining recognition. As a prominent Dividend Triangle in Canada, this engineering and design behemoth is capitalizing on global shifts in climate adaptation and infrastructure renewal. Revenues, profits, and dividends are at all-time highs, with a robust backlog.
CCL Industries (CCL.B.TO)
CCL, a global frontrunner in labeling and packaging, encountered hurdles earlier in 2025 but is regaining its footing. Revenues and earnings are rising once more, aided by acquisitions, and the company has initiated a significant share buyback program. Low-profile, diversified, and steady—CCL remains a leading Canadian compounder.
Alimentation Couche-Tard (ATD.TO)
This one is challenging. Couche-Tard is a core holding, but 2025 has proved difficult. Revenue dropped by 7.5% and EPS fell by 4.2%, mainly due to reduced fuel prices and declining U.S. demand. Merchandise sales shone as a bright spot, but uncertainty surrounding a potential 7-Eleven acquisition clouds the outlook. Long-term, I still believe in the business, though patience is required.
Final Thoughts: Remain Committed
As we reach the midpoint of 2025, investors are faced with an unusual market: unsettling headlines, mixed economic signals, yet the indexes